December 16, 2010 / 5:18 PM / 7 years ago

FBI tried to flip employee in trading probe-source

NEW YORK, Dec 16 (Reuters) - The employee for Taiwan Semiconductor Manufacturing Co (2330.TW) arrested in the U.S. investigation into insider trading by hedge funds was approached by federal agents this past summer, said a person familiar with the matter.

The source, who declined to be identified because of the sensitivity of the matter, said agents from the Federal Bureau of Investigation wanted the employee, who is based in Burlington, Massachusetts, to cooperate with the investigation.

The TSMC employee, Manosha Karunatilaka, was one of four people arrested Thursday and charged by federal prosecutors with passing on confidential corporate information to hedge funds. Karunatilaka was a consultant for California-based “expert network” firm Primary Global Research.

The source said that Karunatilaka, while working for Primary Global, was approached by a number of hedge funds to provide information. One hedge fund he dealt with was Level Global.

In November, the offices of Level Global were raided by the FBI as part of the investigation. A Level Global spokesman was not immediately available for comment, but the hedge fund has said it is not a target of the investigation.

    It is unknown who, if anyone, is representing Karunatilaka. (Reporting by Matthew Goldstein. Editing by Robert MacMillan)

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